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Sunday, September 20, 2015

How to make health care costs affordable?

There are people, including our current president, who believe the way to lower healthcare costs is to take the profit out of it. They essentially believe people should not be allowed to profit off helping sick and vulnerable people. I would like to argue that this is not true, and that profit is an essential component of medicine, mainly because profit is the incentive to make it better.

According to the July 26, 2009, issue of the Wall Street Journal, Obama accused doctors of being more willing to decide to perform a tonsillectomy rather than search for other treatments because performing surgeries makes more profit for them. While I don't doubt some doctors do that, it's a rather unfair to assume all surgeons would prefer to operate over treating their patients with less costly and less risky options.

Eduardo Porter of the New York Times even wrote an article about how for profit healthcare is bad, and how not for profit healthcare is good.

He wrote:

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state.

Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making “proprietary” institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues’ research in his 1988 book “The Nonprofit Economy,” the economist Burton Weisbrod provided a straightforward explanation: “differences in the pursuit of profit.” Sedatives are cheap, Mr. Weisbrod noted. “Less expensive than, say, giving special attention to more active patients who need to be kept busy.”

This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.

He added:

"One study found that patients’ mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined. These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs?

Essentially, he says that private sector profit seeking health care, higher death rate. Nonprofit medical care, lower death rate. What he's saying here is that capitalism is bad and socialism is good. I would now like to explain why this entire premise is fallacious.

There's some who say the government should set price controls on medicine so that people can afford them.
Surely this would drop the cost of medicine, but it would also result in fewer medicine because profit is currently the incentive for pharmaceuticals to take the risks of finding that new medicine.

There's some who will say that the government should run healthcare, and the government should run the pharmaceutical market. They want to do this because they don't think people should be making profits off the sick. In this case, doctors and nurses and pharmacists would all be paid the same. The problem with this is that it would take away the incentive and the desire to choose those careers.

Another problem with this is the government will eventually run out of other people's money to pay for it. When this happens, decisions will have to be made where to make cuts, and the risky and expensive pharmaceutical market could easily be one of them. Individuals will no longer have a choice between an expensive newer inhaler that works better than an older cheap version of a similar medicine.

Another scary thought here is that the government could also decide who gets what medicine. Lord knows that Advair works better than Flovent, although Advair costs a ton more. The government official may decide that since Flovent is cheaper that's what asthmatics are going to get.

This is already starting in a way. I did an experiment with nearly every asthma combination inhaler on the market. I tried Symbicort and Dulera, and both made me jittery. I tried Advair and it works good. I tried Breo and it makes me feel like I don't have asthma. Yet my health insurance won't pay for Advair and Breo, claiming that the other medicines are the same thing yet they are cheaper. You see, we already have less choice at the expense of worse asthma control.

Another way the government could cut costs would be to decide in favor of a productive 40-year-old member of society getting a prescription for Advair at the expense of the 100-year-old lady with a will to live a quality life.

A similar situation was addressed at an ABC prime time special back in 2009 when a woman told Obama, about her one hundred years old mother who really had a will to live. She has a great spirit, a great will to live. She said, "My question to you is, outside the medical criteria for prolonging life for somebody who is elderly, is there any consideration that can be given for a certain spirit, a certain joy of living, quality of life? Or is it just a medical cutoff at a certain age?

Obama essentially said, "No. That's too nebulous. The will to live? How do you assess that? No, probably the compassionate thing to do is just give them a painkiller."

When it comes to respiratory diseases, that 100 year old lady will get the cheap pill that doesn't work as well as the $250 inhaler. Probably the logical choice would be to just give her a painkiller and wave good bye. When someone else is paying you don't get to choose.

Essentially, drugs do not cost too much because of greed on the part of pharmaceutical companies: they are high because of the risk involved in trying to find new medicines to help people like you and me. And they have to make a profit because that's why they hunt for better medicine in the first place. So rather than complain that pharmaceuticals are greedy, we should be thanking them.

I believe that the way to improve healthcare, and to lower costs, is to try something that has never been tried before: Capitalism.